YOUNGSTOWN, Ohio -- Two energy companies drilling in the Marcellus and Utica shales report that their production and resource potential spiked significantly during 2011.
Fort Worth-based Range Resources Corp. reported Monday that aggressive exploration in the Marcellus Shale helped lift the company's resource potential during 2011.
And, Consol Energy Corp., Canonsburg, Pa., also reported stronger results because of its position in the Marcellus and Utica shale plays.
Range said that as of Dec. 31, 2011, its unproved and unrisked resource potential -- in this case, the amount of natural gas that could be potentially tapped in land the company has under lease -- stood at 44 trillion to 60 trillion cubic feet equivalents, up from 35 trillion to 52 trillion cubic feet equivalents last year.
Of this number, Range said that 54% of this potential lies in the vast reserves found in the Marcellus shale, a large rock formation buried deep beneath Pennsylvania, New York and West Virginia. The remaining 46% is attributable to other formations in Appalachia, the Midcontinent and West Texas, the company said.
Proven year-end resource potential stood at 5.1 trillion cubic feet equivalents, the company said.
The unproved resource potential excludes Range's operations in the Utica shale, a deeper formation that runs underneath Pennsylvania and Ohio. Also, the numbers do not include ethane gas extraction.
When considering ethane extraction, Range estimates that its total unproved resource potential would increase to between 47 trillion and 66 trillion cubic feet equivalents, including 2.3 billion to 3.1 billion barrels of natural gas liquids and crude oil.
Western Pennsylvania and eastern Ohio hold the best potential for extracting liquid gas such as ethane, which commands much higher profits compared to dry gas.
As such, Range and other oil and gas companies have shifted focus away from drilling natural dry gas and are concentrating on areas where there is an abundance of natural-gas liquids, such as southwestern Pennsylvania and eastern Ohio.
"The increase in our unproved resource potential is a reflection of our outstanding 2011 drilling results and the technical progress made across many of our key projects," says Jeff L. Ventura, Range's president and CEO. "Of particular note is the increase in natural gas liquids and crude oil portion of our unproved resource potential, which is driven primarily by the progress made in liquids-rich portion of the Marcellus shale and in the horizontal Mississippian oil play."
Consol Energy Corp., based in Canonsburg, Pa., also reported stronger reserves for 2011.
Consol said that its total proved, probable and possible reserves stood at 20.2 trillion cubic feet, a 41% increase from the 14.3 trillion cubic feet reported at year-end 2010.
These reserves also exclude Consol's operations in the Utica shale.
The company reported that the stronger numbers last year resulted from refinements in drilling technology that's allowed Consol to drill multiple wells from a single pad.
Consol reports that it's achieved an industry first in the Marcellus shale by drilling 10 wells from a single pad in Westmoreland County, Pa., in the northwest portion of the state.
The company announced that its proved net reserves through extensions and discoveries totaled 517 billion cubic feet in 2011. Total proved reserves stood at 3.4 trillion cubic feet, a 7% decrease versus last year, as the company begins to redirect drilling capital away from conventional coalbed methane toward the Marcellus and Utica shales.
Consol said last month that it had drilled a total of 78 horizontal wells in the Marcellus shale in 2011 and activated 57 of those wells. Total cost per well averaged $5 million, while the expected recovery averaged 5.2 billion cubic feet per well.
Average maximum production per well averaged 5 million cubic feet per day, Consol reported.
Total daily production from the Marcellus shale rose from 40 million cubic feet per day in 2010 to 77.5 million cubic feet a day during 2011, the company reported.
Published by The Business Journal, Youngstown, Ohio.